According to an IW study, rents for retail space in the city centers of German cities rose by an average of 6.0 percent in 2025. This means that the development in big city retail is well above the general inflation rate of around 2.3 percent and compensates for the weaker development in previous years, according to the study by the German Economic Institute (IW), which the “Rheinische Post” reports on.
“It turns out that retail rents have recovered significantly and are rising faster than consumer prices in most locations,” says the study of 16 cities. “In addition, the results show a concentration of inner-city retail in particularly attractive locations.” In this respect, the analysis suggests that attractive inner-city locations may become smaller in size, but remain in demand.
According to the study, an annual average price premium of around 60 percent compared to the usual urban area is estimated for the central inner city location. However, this declined noticeably in the investigation period from 2018 to 2025. However, this decline will be compensated for by being located directly on the main shopping street, especially in the seven larger cities.
Overall, from the IW’s perspective, the results currently show an upward trend in stationary retail, which is based both on a shake-up in the market – the number of advertisements has fallen overall – and on a less dynamic development in online retail.
According to the information, the analysis is based on rental offers for retailers from Value AG’s real estate market database. The offers provide structured information on offer and property characteristics including rental prices and geographical conditions. The period from January 1, 2018 to December 31, 2025 is considered. In total, the data set includes around 268,000 retail rental offers in Germany.
